Japan`s Script Has Made-in-usa Cast

May 13, 1987|By R.C. Longworth.

The next American industry to be ``targeted`` by Japan for destruction is the auto parts industry. In this, it has had the enthusiastic help of American state governments, including that of Illinois. New information now indicates that Japan has three other Trojan horses--General Motors, Ford and Chrysler.

In recent years, Japan Inc. targeted such U.S. industries as television sets, motorcycles and computer chips and, through cut-rate pricing and illegal trade, wiped them out or brought them to their knees. A recent series by Tribune reporter Robert Kearns documented how Japanese auto parts firms are locating next door to new Japanese auto factories, like the Toyota plant being built in Kentucky, to monopolize supplies to those factories and, using them as a base, to dominate the U.S. auto parts industry.

But a still-secret report prepared for the U.S. Commerce Department says: ``It is a mistake to believe that many Japanese partsmakers are moving to the states just because Japanese assemblers are going. The key is that they want to supply the U.S. Big Three, who have much greater volume, are not as demanding as Japanese assemblers and will not squeeze them on price.``

There are about 70 Japanese auto parts factories in the U.S. already, and the author of the study, John E. Peters of Heuristic Associations Co., says there will be 300 or more by next year.

The U.S. auto parts industry is nearly as big as the auto industy itself. It had $85 billion in sales in 1985 and employs 562,000 workers. If Japan conquers this behemoth on American soil, it will have plenty of all-American helpers.

U.S. state and local governments are bribing the Japanese to set up in their neighborhoods, ``knowing that the excess capacity generated may well smother local American manufacturers,`` Peters says. The states, he adds, can only hope that this carnage ``perhaps will be in some other state.``

In addition, he says, ``The U.S. Big Eight accounting firms, investment banks and law firms are assisting interested Japanese clients.`` But some of the biggest help comes from the Big Three automakers, who ought to be the partsmakers` closest allies.

``General Motors, Chrysler and Ford have . . . put out `Buy American`

campaigns while quietly increasing their own purchases of Japanese auto parts exponentially,`` a U.S. Congress report said. ``All three have offices in Tokyo, encourage joint ventures with Japanese firms and will sometimes help them relocate here.``

Last year, it said, the United States bought $3.8 billion worth of Japanese parts--and sold $203 million, less than 6 percent as much, to Japan. One U.S. automaker offered a Japanese partsmaker free land and guaranteed orders for five years if it would set up here, Peters reports. Another Japanese partsmaker, guided by one of the Big Three, ``ships suspension units to a U.S. warehouse that looks like a factory, makes minor adjustments before repacking the units and then ships (them) to the U.S. buyer.``

``Japanese GM watchers,`` he adds, ``say the big question is not if Japan will get the lion`s share of GM business, but when.``

The ties with the Big Three, plus the locked-in business from the new Japanese auto factories here, will give these Japanese partsmakers a solid U.S. base. From this base, they can batter the remaining U.S. competition with cutthroat prices. In due time, the American companies will be so weakened that, like TV and chip companies before them, they will be sold cheap to the victorious Japanese.

The Japanese firms are moving fast, Peters says, goaded by the climbing yen, the danger of U.S. legislation and the resulting convulsion of the Japanese auto industry. The process could be complete before the decade ends. But alas, he says, the Americans firms ``are mostly blind to the implications and competitive threat.`` If so, the blinders, unlike nearly everything else in this tale, are Made in America, by the Big Three giants of the industry.